Fiesta Bowl fires CEO, at risk of losing BCS status

CBSSports.com wire reports

March 29, 2011

SCOTTSDALE, Ariz. -- The Fiesta Bowl will be asked to justify its inclusion in the BCS after organizers for the Arizona game fired president and CEO John Junker for "an apparent scheme" to reimburse employees for political contributions and "an apparent conspiracy" to cover it up.

The reimbursements, listed as at least $46,539, are an apparent violation of state campaign finance laws and the charter that allows the Fiesta Bowl its nonprofit status. The Arizona attorney general's office is conducting a probe of the matter.

The BCS reacted swiftly, saying it would undertake an investigation of its own to "consider whether the Fiesta Bowl should remain a BCS bowl game or other appropriate sanctions."

The Fiesta board of directors voted unanimously to fire Junker "for his improper and inappropriate activities documented" in the report.

"The entire Fiesta Bowl family is angered and disappointed by what we've seen in the report and by the actions of Mr. Junker," Fiesta Bowl board chairman Duane Woods told reporters at the event's headquarters in downtown Scottsdale. "The Fiesta Bowl is greater than a few individuals, and the lesson here really is that we placed too much trust in a single individual."

Woods did not take questions.

Junker, in his ubiquitous bright yellow Fiesta Bowl sports jacket, had been the face of the event for three decades, leading it from an upstart event to one of the BCS giants. With an annual salary of about $600,000, he had been on paid administrative lead since Feb. 4 after, the board said, he failed to comply with two written directives to cooperate with the investigation.

The board said the probe also uncovered "excessive compensation, nonbusiness and inappropriate expenditures and inappropriate gifts."

Junker's attorney, Steve Dichter, said via email that his client did not have access to the report before it was made public. He said the document was being studied before it was determined whether Junker would have a comment on it.

The investigators said it found the "apparent scheme" to reimburse at least $46,539 for employees' political contributions.

The probe also found "an apparent conspiracy to conceal the reimbursement scheme from the bowl's Board of Directors and state officials," according to the news release accompanying the report.

The BCS issued a statement from executive director Bill Hancock and Penn State University President Graham Spanier, chair of the presidential oversight committee.

"We are deeply disappointed and troubled to learn of these findings related to the Fiesta Bowl," the statement said. "Unprofessional, unethical or improper behavior is unacceptable. There is no place for such activities in higher education or in collegiate sports. It is expected that all parties contracted with the BCS will live up to the highest standards. We do not wish to be associated with entities that believe otherwise. "

BCS leaders said they will appoint a task force to evaluate the bowl's findings and its recommendations. They have also "asked the bowl to demonstrate why it should remain a BCS bowl game. The task force will evaluate the bowl's response, along with the full slate of reforms instituted by the bowl."

And if the bowl remains a part of the BCS, its handling of this matter will be closely monitored going forward.

Bowl officials said the initial, brief investigation of the reimbursements allegations was "flawed." That probe found no evidence of any such wrongdoing.

Woods, head of Waste Management Inc. for the Western Region, played a major role in saving the PGA's Phoenix Open. Now he's got a far bigger cleanup effort.

He said the actions of Junker "unfortunately, have tainted the stellar reputation that the Fiesta Bowl has worked so hard to maintain for more than 40 years. The Fiesta Bowl, however, is greater than a few individuals; it is the product of thousands of dedicated volunteers and exemplary employees who work tirelessly and care so deeply about the Fiesta Bowl and all it does for the state of Arizona."

Woods outlined the time line that began with a report in The Arizona Republic in December 2009, that five former or current Fiesta Bowl employees had been reimbursed for political donations they were encouraged to make. A brief investigation by former Arizona attorney general Grant Woods, no relation to the board chairman, led the board to conclude there was no credible evidence to support the allegations. Now, the board says that report was "flawed."

Duane Woods said that last September, an employee -- identified in the report as Junker's executive assistant Kelly Keough -- came to his office and told him that indeed the reimbursements had been made. That led to the lengthy probe that resulted in Tuesday's report.

Retired state Supreme Court justice Ruth McGregor, one of the three-member investigative panel, said the trio was given full access to everything related to the probe without any resistance from the board.

"We are confident that our report is thorough and accurate," she said. "Although the findings are deeply disturbing, I am gratified that the Fiesta Bowl Board of Directors is moving forward with affirmative and concrete steps to address its problems."

The reimbursements go back to at least 2002, the report concluded. The political donations, mostly to Republican candidates and causes, were not required but strongly suggested, several employees told the investigators.

According to the report, when the initial investigation was made following The Republic's story, lobbyist Gary Husk helped guide Woods away from those who had actually been given reimbursements and groomed others who were interviewed on what to say. The Husk Brothers lobbying firm was paid $286,000 by the Fiesta Bowl in 2009, according reports filed by the IRS.

The board announced a series of steps to reform its operations and operate transparently to prevent any repeat of such problems. That includes hiring a chief financial officer and a general counsel/compliance officer.

The bowl has three years left on its four-year contract BCS contract. That could give it enough time to clean up its problems in the face of a possible challenge from the Cotton Bowl, which long has coveted a return to elite bowl status and now has a big, new stadium to bolster its case.

Among the many expenditures questioned by the report was the 50th birthday celebration for Junker paid for by the Fiesta Bowl at a cost of $33,000 at Pebble Beach, Calif., his car allowance, and paid membership in four elite private golf clubs. There also was a $1,200 trip for Junker and two others to a Phoenix strip club.

Dichter said Junker was not asked about the birthday party by the panel. He said he had nothing to do with paying for it, that it was done by another employee at the time. Junker's attorney provided the Associated Press with the transcripts of the now-ousted CEO's interview with the investigators.

The Fiesta, which also operates the Insight Bowl and many other smaller events, staged the highly anticipated matchup between Auburn and Oregon for the national championship this year.

The seven-member BCS task force investigating the matter will be headed by Spanier and includes Northern Illinois president John Peters, Big East commissioner John Marinatto, Sun Belt commissioner Wright Waters, and athletic directors Jeremy Foley of Florida, Bob Bowlsby of Stanford and Richard Giannani of Southern Mississippi.

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